EQUINOR ASA [EQNR] Filings

20-F 1 eqnr20221231.htm EQUINOR ANNUAL REPORT ON FORM 20-F 2022 eqnr20221231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM

20-F

(Mark One)

☐

REGISTRATION STATEMENT

PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF

1934

☒

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended

December 31, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

☐

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number

1-15200

Equinor ASA

(Exact Name of Registrant as Specified in Its Charter)

N/A

(Translation of Registrant’s Name Into English)

Norway

(Jurisdiction of Incorporation or Organization)

Forusbeen 50

N-4035

Stavanger

Norway

(Address of Principal Executive Offices)

Torgrim Reitan

Chief Financial Officer

Equinor ASA

Forusbeen 50

N-4035

Stavanger

Norway

Telephone No.: 011-

5199-0000

Fax No.: 011-47-

5199-0050

(Name, Telephone,

E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange On Which

Registered

American Depositary Shares

EQNR

New York Stock Exchange

Ordinary shares, nominal value of NOK

2.50

each

EQNR

New York Stock Exchange

*Listed, not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the

requirements of the Securities and Exchange Commission

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the

period covered by the annual report.

Ordinary shares of NOK 2.50 each

3,121,942,270

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☒

Yes

☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to

Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐

Yes

☒

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934 from their obligations under those Sections.

☒

Yes

☐

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the

Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to

file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically Interactive Data File required to be submitted

pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period

that the registrant was required to submit and post such files)

☒

Yes

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,

or an

emerging growth company. See the definitions of “large accelerated filer,”

“accelerated filer,” and “emerging growth company”

in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Emerging growth company

☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate

by check mark if

the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting

standards† provided pursuant to Section 13(a) of the Exchange Act

☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards

Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the

effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 762(b))

by the registered public accounting firm that prepared or issued its audit report.

☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the

registrant included in the filing reflect the correction of an error to previously issued financial statements.

☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive

based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to

§240.10D-1(b).

☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this

filing:

U.S. GAAP

☐

International Financial Reporting Standards

as issued

by the International Accounting Standards Board

☒

Other

☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the

registrant has elected to follow.

Item 17

☐

Item 18

☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2

of the Exchange Act).

☐

Yes

☒

TABLE OF CONTENTS

INTRODUCTION

USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FORWARD-LOOKING STATEMENTS

PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Directors and Senior Management

Advisers

Auditors

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Offer Statistics

Method and Expected Timetable

ITEM 3.

KEY INFORMATION

[Reserved]

Capitalization and Indebtedness

Reason for the Offer and Use of Proceeds

Risk Factors

ITEM 4.

INFORMATION ON THE COMPANY

History and Development of the Company

Business Overview

Organizational Structure

Property, Plant and Equipment

ITEM 4A.

UNRESOLVED STAFF COMMENTS

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Operating Results

Liquidity and capital resources

Research and development, Patents and Licences, etc.

Trend information

Critical Accounting Estimates

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management

Compensation

Board Practices

Employees

Share Ownership

Disclosure of a registrant’s action to recover erroneously awarded compensation.

ITEM 7.

MAJOR SHAREHOLDERS

AND RELATED PARTY

TRANSACTIONS

Major shareholders

Related Party Transactions

Interests of Experts and Counsel

ITEM 8.

FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

Significant Changes

ITEM 9.

THE OFFER AND LISTING

Offer and Listing Details

Plan of Distribution

Markets

Selling Shareholders

Dilution

Expenses of the Issue

ITEM 10. ADDITIONAL INFORMATION

Share Capital

Memorandum and Articles of Association

Material Contracts

Exchange controls

Taxation

Dividends and Paying Agents

Statement by Experts

Documents on Display

Subsidiary Information

Annual Report to Security Holders.

ITEM 11. QUANTITATIVE

AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Debt Securities

Warrants and Rights

Other Securities

American Depositary Shares

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

ITEM 15. CONTROLS AND PROCEDURES

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

ITEM 16B. CODE OF ETHICS

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER

AND AFFILIATED PURCHASERS

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

ITEM 16G. CORPORATE GOVERNANCE

ITEM 16H. MINE SAFETY DISCLOSURE

ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

PART III

ITEM 17. FINANCIAL STATEMENTS

ITEM 18. FINANCIAL STATEMENTS

ITEM 19. EXHIBITS

CONSOLIDATED FINANCIAL STATEMENTS

INTRODUCTION

Unless otherwise indicated, all references herein to “we”, “our”, the “company”, the “group” or

“Equinor” are references to Equinor ASA

and its consolidated subsidiaries.

This document is our annual report on Form 20-F for the year ended 31 December 2022 (“

2022 Form 20-F

”). Reference is made to

our Norwegian Integrated Annual Report for 2022 which is attached hereto as Exhibit 15.4

(the “

2022 Annual Report

”) and our 2022

Remuneration Report which is attached hereto as exhibit 15.6 (the

“2022 Remuneration Report

”). Only (i) the information included in

this 2022 Form 20-F, (ii) the information in the 2022 Annual Report and the 2022 Remuneration Report that is incorporated by

reference in this 2022 Form 20-F (excluding any page references incorporated in the incorporated material

unless specifically noted

otherwise), and (iii) the other exhibits to this 2022 Form 20-F shall be deemed to be filed with

the Securities and Exchange

Commission (“

SEC

”) for any purpose, including incorporation by reference into the Registration Statement

on Form F-3 filed on July

10, 2020 (File No. 333-239808), and Registration Statement on Form S-8 filed on February

9, 2022 (File No. 333-262601) and any

other documents filed by us pursuant to the Securities Act of 1933, as amended, which

purport to incorporate by reference the 2022

Form 20-F. Unless otherwise indicated, references to major headings include all information under such major headings, including

subheadings, unless such reference is a reference to a subheading, in which case such reference includes

only the information

contained under such subheading. Any other information shall not be deemed to be so incorporated by reference.

In addition to the information set out below, the information set forth under the heading “Terms and abbreviations” in Section 5.9 of

Chapter 5 on pages 327 – 334 of the 2022 Annual Report is incorporated herein by reference.

The 2022 Annual Report contains references to our website (https://www

equinor.com).

Information on our website or any other

website referenced in the 2022 Annual Report is not incorporated into this document and should

not be considered part of this

document.

The SEC maintains an Internet website that contains reports and other information regarding

issuers that file electronically with the

SEC. Our filings with the SEC are available to the public through the SEC’s website at http://www.sec.gov.

The information about Equinor’s competitive position in this 2022 Form 20-F (including

the information in the 2022 Annual Report that

is incorporated by reference herein) is based on several sources such as investment analyst reports, independent

market studies, and

internal assessments of market share based on publicly available information about the financial

results and performance of market

players.

USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Since 2007, Equinor has been preparing its audited consolidated financial statements in accordance with

International Financial

Reporting Standards (IFRS) as adopted by the European Union (EU) and as issued by the International

Accounting Standards Board.

IFRS has been applied consistently to all periods in our audited consolidated financial statements

as of 31 December 2022 and 2021,

and for the three years ended 31 December 2022 included in this 2022 Form 20-F (the “Consolidated

financial statements”).

Non-GAAP financial measures are defined as numerical measures that either exclude

or include amounts that are not excluded or

included in the comparable measures calculated and presented in accordance with generally accepted

accounting principles: (i.e,

IFRS in the case of Equinor). The following financial measures included in this 2022 Form 20-F may

be considered non-GAAP

financial measures:

Net debt to capital employed ratio, Net debt to capital employed ratio adjusted, including lease

liabilities and Net debt to capital

employed ratio adjusted

Return on average capital employed (ROACE)

Organic capital expenditures

Free cashflow

Adjusted earnings and adjusted earnings after tax

Total shareholder return (TSR)

Gross capital expenditure (gross capex)

a) Net debt to capital employed ratio

In Equinor’s view, net debt ratio provides a more informative picture of Equinor’s financial strength than gross interest-bearing

financial

debt. Three different net debt ratios are provided below; 1) net debt to capital employed ratio, 2)

net debt to capital employed ratio

adjusted, including lease liabilities, and 3) net debt to capital employed ratio adjusted.

The calculation is based on gross interest-bearing financial debt in the balance sheet and excludes

cash, cash equivalents and

current financial investments. Certain adjustments are made, e.g. collateral deposits classified

as cash and cash equivalents in the

Consolidated balance sheet are considered non-cash in the non-GAAP

calculations. The financial investments held in Equinor

Insurance AS are excluded in the non-GAAP calculations as they are deemed restricted. These two

adjustments increase net debt

and give a more prudent definition of the net debt to capital employed ratio than if the

IFRS based definition was to be used. Following

implementation of IFRS16 Equinor presents a “net debt to capital employed adjusted” excluding lease liabilities

from the gross

interest-bearing debt. Net interest-bearing debt adjusted for these items is included in the

average capital employed. The table below

reconciles the net interest-bearing debt adjusted, the capital employed and the net debt

to capital employed adjusted ratio with the

most directly comparable financial measure or measures calculated in accordance with IFRS.

Forward-looking net debt to capital employed ratio adjusted, including lease liabilities included in

this 2022 Form 20-F is not

reconcilable to its most directly comparable IFRS measure without unreasonable efforts, because the amounts

excluded from IFRS

measures used to determine net debt to capital employed ratio adjusted, including lease liabilities

cannot be predicted with reasonable

certainty.

Calculation of capital employed and net debt to capital

employed ratio

For the year ended 31 December

(in USD million)

2022

2021

2020

Shareholders' equity

53,988

39,010

33,873

Non-controlling interests

Total equity

53,989

39,024

33,892

Current finance debt and lease liabilities

5,617

6,386

5,777

Non-current finance debt and lease liabilities

26,551

29,854

32,338

Gross interest-bearing debt

32,168

36,239

38,115

Cash and cash equivalents

15,579

14,126

6,757

Current financial investments

29,876

21,246

11,865

Cash and cash equivalents and current financial investment

45,455

35,372

18,621

Net interest-bearing debt before adjustments

B1 = B-C

(13,288)

867

19,493

Other interest-bearing elements

6,538

2,369

627

Net interest-bearing debt adjusted, including lease

liabilities

(6,750)

3,236

20,121

Lease liabilities

3,668

3,562

4,405

Net interest-bearing debt adjusted

(10,417)

(326)

15,716

Calculation of capital employed:

Capital employed

A+B1

40,701

39,891

53,385

Capital employed adjusted, including lease liabilities

A+B2

47,239

42,259

54,012

Capital employed adjusted

A+B3

43,571

38,697

49,608

Calculated net debt to capital employed

Net debt to capital employed

(B1)/(A+B1)

(32.6%)

2.2%

36.5%

Net debt to capital employed adjusted, including

lease liabilities

(B2)/(A+B2)

(14.3%)

7.7%

37.3%

Net debt to capital employed adjusted

(B3)/(A+B3)

(23.9%)

(0.8%)

31.7%

Other interest-bearing elements are cash and

cash equivalents adjustments regarding collateral

deposits classified as cash and cash

equivalents in the Consolidated balance sheet but

considered as non-cash in the non-GAAP calculations

as well as financial investments

in Equinor Insurance AS classified as current financial

investments.

b) Return on average capital employed (ROACE)

ROACE is defined as adjusted earnings after tax divided by average capital employed adjusted. For

a reconciliation for adjusted

earnings after tax, see e) later in this section. Average capital employed adjusted at 31 December 2022 is calculated as the

average

of the capital employed adjusted at 31 December 2022 and at 31 December 2021 as presented in

the table Calculation of capital

employed and net debt to capital employed ratio section a).

Equinor uses ROACE to measure the return on capital employed adjusted, regardless of whether

the financing is through equity or

debt. This measure provides useful information for both the group and investors

about performance during the period under

evaluation. The use of ROACE should not be viewed as an alternative to income before financial

items, income taxes and minority

interest, or to net income, which are measures calculated in accordance with IFRS or ratios based

on these figures.

Forward-looking ROACE included in this 2022 Form 20-F is not reconcilable to its most directly

comparable IFRS measure without

unreasonable efforts, because the amounts excluded from IFRS measures used to determine ROACE

cannot be predicted with

reasonable certainty.

Calculated ROACE based on IFRS

31 December

(in USD million, except percentages)

2022

2021

Net income/(loss)

28,744

8,576

Average total equity

46,506

36,458

Average current finance debt and lease liabilities

6,001

6,081

Average non-current finance debt and lease liabilities

28,202

31,096

- Average cash and cash equivalents

(14,853)

(10,442)

- Average current financial investments

(25,561)

(16,555)

Average net-interest bearing debt

(6,210)

10,180

Average capital employed

B = 1+2

40,296

46,638

Calculated ROACE based on Net income/loss and

capital employed

A/B

71.3 %

18.4 %

Calculated ROACE based on Adjusted earnings after

tax and capital employed adjusted

31 December

(in USD million, except percentages)

2022

2021

Adjusted earnings after tax

22,691

10,042

Average capital employed adjusted

41,134

44,153

Calculated ROACE based on Adjusted earnings

after tax and capital employed adjusted

A/B

55.2%

22.7%

c) Organic capital expenditures

Capital expenditures, defined as Additions to PP&E, intangibles and equity accounted investments

in note 5 Segments to the

Consolidated financial statements, amounted to USD 10.0 billion in 2022.

Organic capital expenditures are capital expenditures excluding acquisitions, recognised lease assets (RoU

assets) and other

investments with significant different cash flow patterns. Organic capital expenditure is a measure which Equinor believes gives

relevant information about Equinor’s investments in maintenance and development

of the company’s assets.

In 2022, a total of USD 1.9 billion was excluded in the organic capital expenditures. Among items

excluded were additions of Right of

Use (RoU) assets related to leases and acquisition of Triton Power in UK, certain Statfjord licence shares and US based

battery

storage developer East Point Energy, resulting in organic capital expenditure of USD 8.1 billion.

In 2021, a total of USD 0.4 billion was excluded in the organic capital expenditures. Among items

excluded were acquisition of 100%

interest in Polish onshore renewables developer Wento and additions of Right of Use (RoU) assets related

to leases, resulting in

organic capital expenditure of USD 8.1 billion.

Forward-looking organic capital expenditures included in this 2022 Form 20-F are not reconcilable to the most

directly comparable

IFRS measure without unreasonable efforts, because the amounts excluded from such IFRS measure to determine

organic capital

expenditures cannot be predicted with reasonable certainty.

d) Free cash flow

Free cash flow represents, and is used by management to evaluate, cash generated from

operational and investing activities available

for debt servicing and distribution to shareholders. However, free cash flow is not a measure of our liquidity under IFRS and should

not be considered in isolation or as a substitute for an analysis of our results as reported in this 2022 Form

20-F.

Our definition of free

cash flow is limited and does not represent residual cash flows available for discretionary expenditures.

The following table provides a reconciliation of Free cash flow to Cash flows provided by

operating activities before taxes paid and

working capital items, the most directly comparable financial measure presented in accordance

with IFRS, as of the dates indicated:

Free cash flow

(in USD billion)

2022

2021

Cash flows provided by operating activities before taxes paid and working capital items

83.6

42.0

Taxes paid

(43.9)

(8.6)

Capital expenditures and investments

(8.6)

(8.2)

Proceeds from sale of assets and businesses

1.0

1.9

Free cash flow before capital distribution

32.1

27.1

Dividend paid

(5.4)

(1.8)

Share buy-back

(3.3)

(0.3)

Free cash flow

23.4

25.0

e) Adjusted earnings and adjusted earnings after tax

Management considers adjusted earnings and adjusted earnings after tax together with other non-GAAP

financial measures as

defined below, to provide an indication of the underlying operational and financial performance in the period (excluding financing) by

adjusting by items that are not well correlated to Equinor’s operating performance, and therefore

better facilitate comparisons between

periods.

Adjusted earnings

are based on net operating income/(loss) and adjusts for certain items affecting the income for the period in

order

to separate out effects that management considers may not be well correlated to Equinor’s underlying

operational performance in the

individual reporting period. Management considers adjusted earnings to be a supplemental

measure to Equinor’s IFRS measures,

which provides an indication of Equinor’s underlying operational performance in the

period and facilitates an alternative understanding

of operational trends between the periods. Adjusted earnings include adjusted revenues and other income, adjusted

purchases,

adjusted operating expenses and selling, general and administrative expenses, adjusted depreciation expenses

and adjusted

exploration expenses.

Adjusted earnings adjusts for the following items:

●

Changes in fair value of derivatives:

Certain gas contracts are, due to pricing or delivery conditions, deemed to contain

embedded derivatives, required to be carried at fair value. Also, certain transactions related to

historical divestments include

contingent consideration, are carried at fair value. The accounting impacts of changes in fair

value of the aforementioned are

excluded from adjusted earnings. In addition, adjustments are also made for changes in the unrealised

fair value of derivatives

related to some natural gas trading contracts. Due to the nature of these gas sales contracts, these

are classified as financial

derivatives to be measured at fair value at the balance sheet date. Unrealised gains and losses

on these contracts reflect the

value of the difference between current market gas prices and the actual prices to be realised under the gas sales

contracts. Only

realised gains and losses on these contracts are reflected in adjusted earnings. This presentation best reflects

the underlying

performance of the business as it replaces the effect of temporary timing differences associated with the re-measurements of the

derivatives to fair value at the balance sheet date with actual realised gains and losses for the

period

●

Periodisation of inventory hedging effect:

Commercial storage is hedged in the paper market and is accounted for using the

lower of cost or market price. If market prices increase above cost price, the inventory will

not reflect this increase in value. There

will be a loss on the derivative hedging the inventory since the derivatives always reflect changes in the market

price. An

adjustment is made to reflect the unrealised market increase of the commercial storage. As

a result, loss on derivatives is

matched by a similar adjustment for the exposure being managed. If market prices decrease below

cost price, the write-down of

the inventory and the derivative effect in the IFRS income statement will offset each other and no adjustment is made

●

Over/underlift

: Over/underlift is accounted for using the sales method and therefore revenues were reflected

in the period the

product was sold rather than in the period it was produced. The over/underlift position

depended on a number of factors related to

our lifting programme and the way it corresponded to our entitlement share

of production. The effect on income for the period is

therefore adjusted, to show estimated revenues and associated costs based upon the production

for the period to reflect

operational performance and comparability with peers.

●

The

operational storage

is not hedged and is not part of the trading portfolio. Cost of goods sold is measured

based on the

FIFO (first-in, first-out) method, and includes realised gains or losses that arise due to

changes in market prices. These gains or

losses will fluctuate from one period to another and are not considered part of the underlying

operations for the period

●

Impairment and reversal of impairment

are excluded from adjusted earnings since they affect the economics of an asset for

the lifetime of that asset, not only the period in which it is impaired or the

impairment is reversed. Impairment and reversal of

impairment can impact both the exploration expenses and the depreciation, amortisation and net impairments line

items

●

Gain or loss from sales of assets

is eliminated from the measure since the gain or loss does not give an indication

of future

performance or periodic performance; such a gain or loss is related to the cumulative value creation from the

time the asset is

acquired until it is sold

●

Eliminations (Internal unrealised profit on inventories:):

Volumes derived from equity oil inventory will vary depending on

several factors and inventory strategies, i.e. level of crude oil in inventory, equity oil used in the refining process and level of in-

transit cargoes. Internal profit related to volumes sold between entities within the group, and still

in inventory at period end, is

eliminated according to IFRS (write down to production cost). The proportion of realised versus unrealised gain will

fluctuate from

one period to another due to inventory strategies and consequently impact net

operating income/(loss). Write-down to production

cost is not assessed to be a part of the underlying operational performance, and elimination

of internal profit related to equity

volumes is excluded in adjusted earnings

●

Other items of income and expense

are adjusted when the impacts on income in the period are not reflective of Equinor’s

underlying operational performance in the reporting period. Such items may be unusual

or infrequent transactions but they may

also include transactions that are significant which would not necessarily qualify as either

unusual or infrequent. However, other

items adjusted do not constitute normal, recurring income and operating expenses for the company. Other items are carefully

assessed and can include transactions such as provisions related to reorganisation, early retirement,

etc.

●

Change in accounting policy

are adjusted when the impacts on income in the period are unusual or infrequent,

and not

reflective of Equinor’s underlying operational performance in the reporting

period

Adjusted earnings after tax

– equals the sum of net operating income/(loss) less income tax in reporting segments and adjustments

to operating income taking the applicable marginal tax into consideration. Adjusted earnings after

tax excludes net financial items and

the associated tax effects on net financial items. It is based on adjusted earnings less the tax effects on all elements

included in

adjusted earnings (or calculated tax on operating income and on each of the adjusting items

using an estimated marginal tax rate). In

addition, tax effect related to tax exposure items not related to the individual reporting period is excluded from

adjusted earnings after

tax. Management considers adjusted earnings after tax, which reflects a normalised tax charge

associated with its operational

performance excluding the impact of financing, to be a supplemental measure to Equinor’s

net income. Certain net USD denominated

financial positions are held by group companies that have a USD functional currency that is different from the currency

in which the

taxable income is measured. As currency exchange rates change between periods, the basis

for measuring net financial items for

IFRS will change disproportionally with taxable income which includes exchange gains and losses

from translating the net USD

denominated financial positions into the currency of the applicable tax return. Therefore, the

effective tax rate may be significantly

higher or lower than the statutory tax rate for any given period. Adjusted taxes included

in adjusted earnings after tax should not be

considered indicative of the amount of current or total tax expense (or taxes payable)

for the period.

Adjusted earnings and adjusted earnings after tax should be considered additional measures rather

than substitutes for net operating

income/(loss) and net income/(loss), which are the most directly comparable IFRS measures. There

are material limitations

associated with the use of adjusted earnings and adjusted earnings after tax compared with the

IFRS measures as such non-GAAP

measures do not include all the items of revenues/gains or expenses/losses of Equinor that

are needed to evaluate its profitability on

an overall basis. Adjusted earnings and adjusted earnings after tax are only intended to be

indicative of the underlying developments

in trends of our on-going operations for the production, manufacturing and marketing of our

products and exclude pre-and post-tax

impacts of net financial items. Equinor reflects such underlying development in our operations by eliminating

the effects of certain

items that may not be directly associated with the period's operations or financing. However, for that reason, adjusted earnings and

adjusted earnings after tax are not complete measures of profitability. These measures should therefore not be used in isolation.

Items impacting net operating income/(loss) in the

full year of 2022

Equinor

group

E&P Norway

E&P

Internationa

E&P USA

MMP

REN

Other

(in USD million)

Total revenues

and other income

150,806

75,930

7,431

5,523

148,105

185

(86,367)

Adjusting items

(896)

(487)

185

(506)

(110)

Changes in fair value of derivatives

(207)

(263)

205

(149)

Periodisation of inventory hedging effect

(349)

Impairment from associated companies

Over-/underlift

510

507

Other adjustments

(0)

(22)

Gain/loss on sale of assets

(850)

(731)

(9)

(111)

(0)

Adjusted total revenues and other income

149,910

75,443

7,616

5,523

147,599

(86,345)

Purchases [net of inventory variation]

(53,806)

(116)

(0)

(139,916)

86,227

Adjusting items

(610)

(33)

(577)

Operational storage effects

(33)

Eliminations

(577)

Adjusted purchases [net of inventory variation]

(54,415)

(116)

(0)

(139,949)

85,650

Operating and administrative expenses

(10,594)

(3,782)

(1,698)

(938)

(4,591)

(265)

681

Adjusting items

(54)

Over-/underlift

(41)

(54)

Other adjustments

Gain/loss on sale of assets

Provisions

Adjusted operating and administrative expenses

(10,530)

(3,836)

(1,675)

(933)

(4,516)

(255)

686

Depreciation, amortisation and net impairments

(6,391)

(4,167)

(1,731)

(361)

(4)

(142)

Adjusting items

(2,488)

(819)

286

(1,060)

(895)

Impairment

1,111

1,033

Reversal of impairment

(3,598)

(821)

(747)

(1,060)

(970)

Adjusted depreciation, amortisation and net

impairments

(8,879)

(4,986)

(1,445)

(1,422)

(881)

(4)

(142)

Exploration expenses

(1,205)

(366)

(638)

(201)

Adjusting items

(11)

Impairment

Reversal of impairment

(26)

Adjusted exploration expenses

(1,146)

(361)

(573)

(212)

Net operating income/(loss)

78,811

67,614

3,248

4,022

3,612

(84)

399

Sum of adjusting items

(3,871)

(1,355)

559

(1,065)

(1,360)

(100)

(550)

Adjusted earnings/(loss)

74,940

66,260

3,806

2,957

2,253

(184)

(151)

Tax on adjusted

earnings

(52,250)

(51,373)

(1,248)

(79)

474

(38)

Adjusted earnings/(loss) after tax

22,691

14,887

2,558

2,878

2,727

(170)

(189)

1) The adjustment in E&P International and Other is related

to recirculation of currency effects resulting from

exit of equity accounted companies.

Items impacting net operating income/(loss) in the

full year of 2021

Equinor

group

E&P Norway

E&P

Internationa

E&P USA

MMP

REN

Other

(in USD million)

Total revenues

and other income

90,924

39,386

5,566

4,149

87,393

1,411

(46,980)

Adjusting Items

(1,836)

(339)

(155)

(1,381)

(4)

Changes in fair value of derivatives

(146)

(145)

(37)

Periodisation of inventory hedging effect

Impairment from associated companies

Over-/underlift

(125)

(194)

Gain/loss on sale of assets

(1,561)

(5)

(167)

(1,385)

(4)

Provisions

(57)

Adjusted total revenues and other income

89,088

39,047

5,609

4,149

87,238

(46,984)

Purchases [net of inventory variation]

(35,160)

(0)

(58)

(0)

(80,873)

(0)

45,771

Adjusting Items

230

(231)

461

Operational storage effects

(231)

Eliminations

461

Adjusted purchases [net of inventory variation]

(34,930)

(0)

(58)

(0)

(81,104)

(0)

46,232

Operating and administrative expenses

(9,378)

(3,652)

(1,406)

(1,074)

(3,753)

(163)

670

Adjusting Items

(11)

(32)

(87)

Over-/underlift

(32)

Other adjustments

(43)

(50)

Gain/loss on sale of assets

Provisions

(37)

Adjusted operating and administrative expenses

(9,389)

(3,590)

(1,438)

(1,039)

(3,841)

(163)

682

Depreciation, amortisation and net impairments

(11,719)

(4,900)

(3,321)

(1,734)

(1,604)

(3)

(156)

Adjusting Items

1,288

(1,102)

1,587

735

Impairment

2,963

276

1,836

116

735

Reversal of impairment

(1,675)

(1,379)

(250)

(47)

Adjusted depreciation, amortisation and net

impairments

(10,431)

(6,002)

(1,734)

(1,665)

(869)

(3)

(156)

Exploration expenses

(1,004)

(363)

(451)

(190)

Adjusting Items

152

101

Impairment

175

101

Reversal of impairment

(22)

Adjusted exploration expenses

(852)

(356)

(350)

(146)

Net operating income/(loss)

33,663

30,471

329

1,150

1,163

1,245

(695)

Sum of adjusting items

(177)

(1,372)

1,698

147

262

(1,381)

469

Adjusted earnings/(loss)

33,486

29,099

2,028

1,297

1,424

(136)

(227)

Tax on adjusted

earnings

(23,445)

(21,825)

(670)

(16)

(998)

Adjusted earnings/(loss) after tax

10,042

7,274

1,358

1,281

426

(112)

(187)

1) E&P Norway, E&P International,

MMP and Other segments are restated due to implementation

of IFRS 16 in the segments

2) The adjustment for MMP is related to an insurance settlement.

f) Total

shareholder return (TSR)

Total shareholder return (TSR) is the sum of a share’s price growth and dividends for the same period, divided by the share price at

beginning of period.

g) Gross capital expenditure (gross capex)

Capital expenditures, defined as Additions to PP&E, intangibles and equity accounted investments,

amounted to USD 10.0 billion in

2022 and USD 8.5 billion in 2021 (as referenced in note 5 Segments to the Consolidated

financial statements).

Gross capital expenditures are capital expenditures that are adjusted to exclude additions of Right

of use assets related to leases (as

referenced in note 12, Property, plant and equipment, to the consolidated financial statements) and to include Equinor’s proportionate

share of capital expenditures in equity accounted investments not included in additions to equity

accounted investments, within the

REN segment for 2021 and 2022. The calculation of gross capital expenditures excludes additions

to right of use assets related to

leases, as management believes that this better reflects the Group's investments in the

business to drive growth.

In 2022, a net total adjustment of USD 0.4 billion was excluded, resulting in gross capital

expenditures of USD 9.6 billion. In 2021, a

net total adjustment of USD 0.3 billion was included, resulting in gross capital expenditures of USD

8.8 billion.

Forward-looking gross capital expenditures included in this 2022 Form 20-F are not reconcilable to the

most directly comparable IFRS

measure without unreasonable efforts, because the amounts excluded from such IFRS measure to determine gross

capital

expenditures cannot be predicted with reasonable certainty.

FORWARD-LOOKING STATEMENTS

This 2022 Form 20-F (including information incorporated

herein from the 2022 Annual Report) contains

certain forward-looking statements that

involve risks and uncertainties, in particular in the

sections incorporated by reference in Item 4

of this 2022 Form 20-F. In some cases, we use

words such as "aim", "ambition", "anticipate", "believe",

"continue", "could", "estimate", "expect", "intend", "likely",

"objective", "outlook", "may",

"plan", "schedule", "seek", "should", "strategy", "target",

"will", "goal" and similar expressions to identify

forward-looking statements. All

statements other than statements of historical fact,

including: the commitment to develop as a broad

energy company and ambition to be a

leading company in the energy transition; ambition

to reach net zero by 2050 and expectations

regarding progress on our energy transition

plan and just transition plan; our ambitions regarding

reduction in operated emissions and net

carbon intensity and allocation of gross capex*

to renewables and low carbon solutions; our ambitions

to decarbonise and maintain value in oil and gas,

industrialise and upscale offshore

wind, industrialise and commercialise carbon capture

and storage and upscale and develop new

value chains in hydrogen; ambition to attain a

leadership position in the European CCS market; aims,

expectations and plans for renewables production

capacity and power generation,

investments in renewables and low-carbon solutions

and the balance between oil and renewables

production; our expectations with respect to

net carbon intensity, operated emissions, carbon and methane intensity and

flaring reductions; our internal carbon price

and other financial

metrics for investment decisions; break-even considerations

and targets; aims and expectations regarding

Equinor’s resilience across different

climate scenarios; future levels of, and expected value

creation from, oil and gas production, scale and

composition of the oil and gas portfolio,

and development of CCS and hydrogen businesses;

use of compensation

and offset mechanisms and high-quality carbon sinks; plans

develop fields; our intention to optimise and mature

our portfolio; future worldwide economic

trends, market outlook and future economic

projections and assumptions, including commodity

price assumptions; expectations and plans regarding

capital expenditures; future financial

performance, including cash flow, liquidity and return on average capital

employed (ROACE)*; expectations regarding

cash flow and returns

from our oil and gas portfolio and renewable

projects; organic capital expenditures through 2026;

expectations and estimates regarding

production and execution of projects; the ambition

to keep unit of production cost in the top quartile

of our peer group; scheduled maintenance

activity and the effects thereof on equity production; business

strategy and competitive position; sales, trading

and market strategies; research

and development initiatives and strategy, including ambitions regarding

allocation of research and development capital

towards renewables

and low carbon-solutions; expectations related to production

levels, unit production cost, investment, exploration

activities, discoveries and

development in connection with our ongoing transactions

and projects; our ambitions, expectations and

plans regarding diversity and inclusion

and employee training; plans and expectations regarding

completion and results of acquisitions, disposals and

other contractual arrangements

and delivery commitments; plans, ambitions and expectations

regarding recovery factors and levels, future margins and

future levels or

development of capacity, reserves or resources; planned turnarounds and other

maintenance activity; expectations regarding oil and

gas

volume growth, including for volumes lifted and sold

to equal entitlement production; estimates related

to production and development,

forecasts, reporting levels and dates; operational expectations,

estimates, schedules and costs; expectations relating

to licences and leases;

oil, gas, alternative fuel and energy prices, volatility, supply and demand; plans

and expectations regarding processes related

to human rights

laws, corporate structure and organizational policies;

technological innovation, implementation, position

and expectations; expectations

regarding role and composition of the board and

our remuneration policies; our goal of

safe and efficient operations; effectiveness of our

internal policies and plans; our ability to manage

our risk exposure, our liquidity levels and

management of liquidity reserves; estimated or

future liabilities, obligations or expenses; expected

impact of currency and interest rate fluctuations

and LIBOR discontinuation; projected

outcome, impact or timing of HSE regulations; HSE

goals and objectives of management for

future operations; our ambitions and plans

regarding biodiversity (including our aim to develop

a net-positive impact approach for projects)

and value creation for society; expectations

related to regulatory trends; impact of PSA effects; projected

impact or timing of administrative or governmental

rules, standards, decisions,

standards or laws (including taxation laws); projected

impact of legal claims against us; plans

for capital distribution, share buy-backs and

amounts and timing of dividends are forward-looking

statements.

You should not place undue reliance on these forward-looking statements. Our actual results

could differ materially from those anticipated in

the forward-looking statements for many reasons, including

the risks described in the risk factors incorporated

in Item 3.D of this 2022 Form

20-

These forward-looking statements reflect current views about

future events, are based on management’s current expectations

and

assumptions and are, by their nature, subject to

significant risks and uncertainties because they relate

to events and depend on circumstances

that will occur in the future. There are a number

of factors that could cause actual results and

developments to differ materially from those

expressed or implied by these forward-looking statements,

including levels of industry product supply, demand and pricing, in particular in

light

of significant oil price volatility and the uncertainty

caused by the European security situation, including

Russia’s invasion of Ukraine;

unfavorable macroeconomic conditions and inflationary

pressures; exchange rate and interest rate

fluctuations; levels and calculations of

reserves and material differences from reserves estimates;

regulatory stability and access to resources, including

attractive low carbon

opportunities; the effects of climate change and changes

in stakeholder sentiment and regulatory requirements

regarding climate change;

changes in market demand and supply for renewables;

inability to meet strategic objectives; the development

and use of new technology;

social and/or political instability, including as a result of Russia’s invasion of Ukraine;

failure to manage digital and cyber threats; operational

problems; unsuccessful drilling; availability of adequate

infrastructure; the actions of field partners

and other third-parties; reputational damage;

the actions of competitors; the actions of the Norwegian

state as majority shareholder and exercise of ownership

by the Norwegian state;

changes or uncertainty in or non-compliance with

laws and governmental regulations; adverse changes

in tax regimes; the political and

economic policies of Norway and other oil-producing

countries; regulations on hydraulic fracturing and

low-carbon value chains; liquidity,

interest rate, equity and credit risks; risks relating

to trading and commercial supply activities;

an inability to attract and retain personnel;

ineffectiveness of crisis management systems; inadequate insurance

coverage; health, safety and environmental risks; physical

security risks;

failure to meet our ethical and social standards;

non-compliance with international trade sanctions;

and other factors discussed elsewhere in

this 2022 Form 20-F.

The achievement of Equinor’s climate ambitions

depends, in part, on broader societal shifts in

consumer demands and technological

advancements, each of which are beyond Equinor’s

control. Should society’s demands and technological innovation

not shift in parallel with

Equinor’s pursuit of its energy transition plan,

Equinor’s ability to meet its climate ambitions

will be impaired. The calculation of Equinor’s

net

carbon intensity presented in this report includes an

estimate of emissions from the use of sold products

(GHG protocol category 11) as a

EQUINOR ASA [EQNR] Filings

EQUINOR ASA [STOHF] Filings